Clear DefinitionsInitial DEX Offering
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Pronunciation
[ih‑nish‑uhl dex aw‑fuh‑ring]
Analogy
An IDO is like an open auction in a public marketplace rather than through a broker.
Definition
A token sale conducted on a decentralized exchange (DEX), allowing direct peer‑to‑peer participation without centralized intermediaries.
Key Points Intro
IDOs democratize token sales via:
Key Points
Liquidity pools: Tokens and collateral locked in AMM pools.
Permissionless: Often no centralized vetting process.
Instant trading: Liquidity enabled immediately post‑launch.
Smart contract automation: Sale and listing logic on‑chain.
Example
Technical Deep Dive
IDO contracts deposit token and base asset into an automated market maker (AMM) pool with initial liquidity. Participants trade against the pool. Pricing follows constant‑product formula (`x*y=k`). Sale parameters (min/max purchase) enforced via pre‑transfer hooks or whitelists in the pool contract.
Security Warning
Rug pulls are common—verify token contract and initial liquidity lock durations.
Caveat
Low initial liquidity can cause high slippage and price volatility.
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